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TSB to cut jobs and branches this year, parent firm reveals

The boss of TSB's Spanish parent firm Sabadell has told reporters the UK brand's cost-saving plans this year will result in job losses and branch closures.

Sabadell CEO Cesar Gonzalez-Bueno was questioned at a news conference, following the publication of the group's annual results, about a £29m provision made by TSB for restructuring costs this year.

When asked if it would involve a reduction in bank staff and branches, he replied: "Yes, it will include both" but he did not put a number of either.

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He went slightly further on the issue than TSB was explicitly prepared to do itself while outlining its own performance during 2023.

However, the £29m provision did include an estimated £24.4m for estimated employee severance costs.

TSB reported a 30% rise in pre-tax profits to £237.2m, aided by higher interest rates.

It proposed a dividend of £120m to Sabadell - up from the £50m sum in 2022.

But it added that inflationary pressures on its bottom line remained stubborn.

Annual operating expenses only fell by 3.9% compared to the previous 12-month period when the effects of a big fine, relating to its disastrous 2018 customer migration programme, was excluded.

TSB said it had set aside the £29m for a "programme of strategic cost saving initiatives which will reduce costs from 2024 onwards".

Rivals, including Barclays and Lloyds, have also stepped up the pace of cost-cutting in recent months despite strong profitability.

Mr Gonzalez-Bueno said details on planned cuts would be announced by TSB in due course, but the aim was to bring its so-called efficiency ratio - which measures a bank's cost-to-income - down towards 60% from a current 73.6%.

The bank told Sky News in reaction to his remarks: "We have been clear about our focus on reducing costs, but as with any announcements about changing how we operate, we always consult with our colleagues first."

TSB currently has 5,426 employees and 211 branches.

Robin Bulloch, TSB's chief executive, said of its 2023 performance: "We are reporting another year of sustained profitability, demonstrating the impact of both our continued focus on customers, delivering products and services that genuinely meet their needs, and the work to make TSB a simpler, more efficient, and resilient bank.

"Throughout the cost of living challenges, our Money Confidence purpose has resonated strongly with our customers - and I'd like to thank everyone at TSB for their continued hard work to step up to support them."